44% of iPhone apps lose revenue during sale

Distimo released an interesting report today that examined the overall effects of different app promotions across the iPhone and iPad App Store, as well as the Android Market. One of the most striking stats from the report was that "44% of the iPhone applications that have been on sale lost revenue during the sale, and 23% saw a decline in revenue by more than 20%".

Distimo factored in how much of a price cut each app received, and put it into the above graph. As you might expect, the sharper the price cut, the greater the revenue. The graph shows that, among those that cut their price by 80%,  just as many apps lost 20% or more revenue as gained more than 100% revenue.  On the whole, putting apps on sale is still a good thing, though; the average iPhone app increased revenue by 22%, iPad apps increased by 19%, and Android app revenue went up by 29%. As you might expect, all three categories see a significant spike on the first day.

The report also examined the effects of having apps being featured. As it turns out, Android apps see a much higher boost in rank from being feature than on the iPhone or iPad. On average, an iPhone app has its rank bumped up 15 spots in the first three days of being featured, while iPad apps go up 27. Android apps? They climb 42 spots, on average. Only 11% of featured iPhone apps climbed more than 50 ranks, compared to 26% of featured Android apps.

Any app developers in the house reconsidering putting their app on sale now? I'm definitely more inclined to do my app shopping when cuts are down at the $0.99 range, but what about you guys?

Simon Sage

Editor-at-very-large at Mobile Nations, gamer, giant.

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Reader comments

44% of iPhone apps lose revenue during sale

12 Comments

I'm a very small time App developer, and this study is very interesting. However, I think that one thing missing from this study is the effect that the sale has on the App's visiblity. When someone does a search in iTunes for Apps, Apple has some metric for providing the Apps that user's are more likely to be interested in. Newer Apps are shown near the top of the search, and Apps with lots of downloads and positive reviews are also given higher rankings.
Maybe App developers lose money during the duration of the sale, but make up for it in the long run by exposing the App to more users, getting mroe reviews in the process, and getting better visibility in iTunes.

i'm a pretty new iphone user but i've scanned the app store (envious) for years. It's horribly bad at searching. Its so hard to find stuff because the search is slow and and lacking detail. Because it's so slow i'll often just grow tired and quit. so i don't think that remotely helps app developers because it means after you see what's on top you stop looking because looking is needlessly unpleasant.

I think also something to note about android apps, as someone who is ex-droidX, it is damn near impossible to find good apps in the App Market unless you A) know what you're looking for or B) see the app featured somewhere. That's why websites like Android AppBrain exist so that apps are easier to find.
So to me, i'm not surprised that featured apps see higher installs. It's really the only reliable way to find out about good apps.

To add a bit to my comment, my last sentence refers specifically to the android featured apps. A lot of times on iOS featured apps are already successful so they may not skyrocket in popularity as dramatically as previously unknown featured Android apps

as i wrote above i find the apple store equally cumbersome when finding apps. i don't use the store for anything else.

I agree with Ron, it would be nice to see the revenue gained from the exposure the app gets in the long run.. I'd bet to say that does well for the app except for the fact that if someone says "oh yeah i got this for .99" and then if the person sees it for 1.99 in the app store they may wait and hope it enters a sale again... I definitely try to buy on sale/free as I am a broke college student. :)

Looks a bit disingenuous to me. You can't take the number of applications sold for a time period at the sale price and say that you "lost" money on the sales. Simply because you can't say that ANY of those people would have bought at the higher price. 0 sales = 0 earnings.

@redshirt presumably they were counting daily income from the app (i.e. price*sales) and comparing daily totals for the period before and during the sale to get their figures? That way the sales numbers themselves don't matter, its income that matters.
Of course this doesn't factor in apps that need support- our MailShot app handles group email, for example, and will inevitably need a certain degree of customer support simply due to the many ways people can have their devices configured.
We can provide a much better level of support to a smaller number of customers at $3.49 than we could for a larger number at $0.99

There are so many variable's that go into this. If you app is 1.99 everyday and you average 100 sales a day then you would need 200 sales a day if you put your app on sale for .99 to maintain the same amount of revenue. There is not tried and true method to gaurantee a sales increase that is directly related to your sales price.

Nobody else finds this as obvious!?!?
Of course revenue goes down when you sell something at a discount. Sales are designed to move inventory and gain exposure, NOT increase revenue.